Do you know the ins and outs concerning Social Security payments? Here are four myths debunked concerning Social Security.
#1 My retirement age will NOT impact my Social Security benefits
Not true! Your retirement age has everything to do with the amount of benefit you expect to receive. If you retire before your full retirement age, you will receive a reduced payment (generally at the age of 62). For those born before the year 1960, the full retirement age is 66 (and certain months, depending on the year). For those born in 1960 or later, the full retirement age is 67.
#2 If I receive my benefits before full retirement age, then I can increase it at full retirement age.
Not so. If you make an election to receive your benefits before full retirement age, you will NOT be able to obtain an increased benefit later. Therefore, it is essential to plan the best time to receive your benefit. There is an excellent tool on the Social Security’s website that can provide the amounts you can expect to receive at different retirement ages.
#3 My benefits are not taxable
Not necessarily true. About 40 percent of people who receive Social Security benefits are required to pay taxes on the benefits. Determining whether your benefit is taxable or not, depends on your taxable income and filing status. If you expect to receive only Social Security benefits, the amount is generally not taxable. However, if you earn income from other sources, you may be required to pay taxes on the benefits.
#4 If my divorced spouse dies, I am unable to receive his or her benefits
Not so. If you are the survivor of a divorced spouse, you may be eligible to receive Social Security benefits. This benefit is available to those who have been married to their spouse for at least ten years. If you remarry after you reach age 60 (50 if you are disabled), the remarriage will not impact your eligibility.
Social Security offers a death benefit for $255. The amount is paid to a spouse or child to assist with expenses following death. Individuals would need to meet certain conditions. However, the amount must be requested within two years of the date of death.